The Philippines: Priorities and Prospects for Development

Abstract

The outlook for the Philippine economy during the next decade is heavily influenced by recent economic events, which resulted in policies for internal development that introduced a distinct change of direction into the economy. The development task facing the government is to lay the foundation for future growth that the economy can achieve in the rest of this century. The economy will be dependent upon foreign inflows to finance prospective balance of payments deficits, which will be larger as a result of decisions to finance a higher level of capital formation. Projections are based upon assumptions concerning future prospects for exports and price trends for both exports and imports. Development will be concentrated in the industrial sector, including: (i) large resource-based industrial projects with a substantial increase in the power program; (ii) import substitution involving industrial projects for the production of intermediate and capital goods; and (iii) expansion of manufacturing production for export. Other aspects are the expansion of public investment in infrastructure and provision of public services. Three areas of particular importance will be education, health, and family planning.